2 nd NATIONAL MOOT COURT COMPETITION, NAVRACHANA UNIVERSITY, 2023

2 nd NATIONAL MOOT COURT COMPETITION, NAVRACHANA UNIVERSITY, 2023

BEFORE THE HON’BLE HIGH COURT OF HIMA PRADESH NMC-22

W.P No. ../2023

IN THE MATTER OF:

ALPHA PHRAMA. PVT. LTD. ... PETITIONER

V.

STATE OF HIMA PRADESH &

CONTROLLER OF PATENTS ... RESPONDENT

Under Article 226 of Constitution of Indiana

WRITTEN SUBMISSION ON BEHALF OF THE PETITIONER

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TABLE OF CONTENTS

SR.NO CONTENTS PAGE

NO.

1. Index of Authorities 3-4

2. List of Abbreviations 5

3. Statement of Jurisdiction 6

4. Statement of Facts 7-9

5. Issues Raised 10

6. Summary of Arguments 11

7. Arguments Advanced 12-25

8. Prayer 26

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INDEX OF AUTHORITIES

➢ CASE LAWS

1. Telemecanique & Controls (I) Limited v. Schneider Electric Industries SA, 2002
2. Bishwanath Prasad Radhey Shyam v. Hindustan Metal Industries, 1979
3. Reynolds v. Smith, 1903
4. Bajaj Auto Ltd v. TVS Motors Company Ltd., 2008
5. CTR Manufacturing Industries Limited v. Sergi Transformer Explosion Prevention
Technologies Pvt Ltd,2016
6. F. Hoffman-La Roche Ltd. v. Cipla Ltd.,2016
7. Novartis AG v. Union of India, 2013
8. D.T.C. v Mazdoor Union D.T.C., A.I.R. 1991 SC 101
9. M.P. Electricity Board, Jabalpur v. Harsh Wood Products, (1996) 4 SCC 522
10. Tata Cellular v. Union of India,1994” 1996 AIR 11
11. ABL International Ltd. v. Export Credit Guarantee Corporation of India, 2004” 3 SCC
553,
12. Y.Konda Reddy v State of A.P., AIR 1997” AP 121
13. U.P. State Bridge Construction Corpn Ltd v. Bangalore Development Authority, 2005
14. Sugen Inc. v. A. Rao, 2013
15. M/S Kuldip Tourist Taxi Service vs. Doordarshan Kendra & Ors.
16. Central Inland Water Transport Corporation Ltd v. Brojo Nath Ganguly & Anr” (1986
SCR (2) 278)
17. Maneka Gandhi v Union of India, AIR 1978 SC 597
18. Birendra Prasad Singh v. State of Bihar, 2021
19. Steel Authority of India Ltd. v. Gupta Brother Steel Tubes Ltd. 2009 10 SCC 63
20. In A. T. Brij Paul Singh v. State of Gujarat, (1984) 4 SCC
21. Bharat Coking Coal Ltd. v. L.K. Ahuja, (2004) 5 SCC 109

➢ STATUTES
1. PATENTS ACT,1970
2. BIODIVERSITY ACT, 2002
3. CONSTITUTION OF INDIA,1957

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➢ BOOKS
1. P.M. Bakshi, The Constitution of India, 15th Edition, 2018
2. Durga Das Basu, Commentary on the Constitution of India, 8th Edition, 2007
3. Mr Sagar Kishore Savale, Indian Patents Act, 1970
4. Pavan Duggal, Cyber Law, 2nd Edition
5. Vakul Sharma, Information Technology, 5th Edition.
6. V.K. Ahuja, Intellectual Property Rights, 2nd Edition
7. Adarsh Ramanujan, Patent Law, 2nd Edition

➢ ONLINE SOURCES
1. Manupatra Online Resources, http://www.manupatra.com.
2. SSC Online, http://www.scconline.co.in.
3. Lexis Nexis Academica, http://www.lexisnexis.com/academica.
4. Lexis Nexis Legal, http://www.lexisnexis.com/in/legal.

➢ DICTIONARIES REFERRED
1. Law Lexicon, P. Ramanatha Aiyar, 6th Reprint Edition 1995
2. Oxford Advanced Learner’s Dictionary, 4th Edition

➢ INTERNATIONAL TREATIES REFERRED

1.Paris Convention for Protection Of Industrial Property,1883
2. Indigenous and Tribal Peoples Convention,1989
3.Convention On Bio-Diversity,1992
4.Nagoya Protocol,2010

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LIST OF ABBREVIATIONS

1. AIR All India Reporter

2. Anr Another

3. Ch Chapter

4. Corpn. Corporation

5. CTC Current Tamil Nadu Cases

6. Del Delhi

7. DLT Delhi Law Tribunal

8. IPAB Intellectual Property Appellate Board

9. JIPR Journal of Intellectual Property Rights

10. Ltd Limited

11. Mad. Madras

12. Nag Nagpur

13. OA Original Application

14. Ors Others

15. OS Original suit

16. PTC Patent & Trade Marks Cases

17. RPC Reports of Patent, Design and Trade Mark Cases

18. SC Supreme Court

19. SCC Supreme Court Cases

20. v. Versus

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STATEMENT OF JURISDICTION

The Hon’ble High Court of Hima Pradesh has the jurisdiction to entertain and dispose of
the present case by virtue of Article 226(1)1 of the Constitution of Indiana .

The Petitioner has approached the High Court through its Writ Jurisdiction.

1 Article 226 of the Indian Constitution reads as follows:

Power of High Courts to issue certain writs

1. Notwithstanding anything in Article 32 every High Court shall have powers, throughout
the territories in relation to which it exercise jurisdiction, to issue to any person or
authority, including in appropriate cases, any Government, within those territories
directions, orders or writs, including writs in the nature of habeas corpus, mandamus,
prohibitions, quo warranto and certiorari, or any of them, for the enforcement of any
of the rights conferred by Part III and for any other purpose

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STATEMENT OF FACTS

1. Indiana is a one of the developing country situated in South Asia. It is rated as one of
17 mega-diverse countries with over 1,26,756 species of plants, animals, fungi, and
micro-organisms identified and classified. The Eastern Ghats and Western Ghats are
the two identified global hot spots of Biodiversity.

2. The rich biodiversity of Indiana is matched with an equally rich cultural diversity and
a unique wealth of traditional knowledge system, developed, preserved and practiced
by millions of ethnic and indigenous people living in the rural and fore st areas.

3. The Republic of Indiana is also a party to the Paris Convention for the Protection of
Industrial Property of 1883 as amended, the Convention on International Trade in
Endangered Species of Wild Flora and Fauna of 1973, the Indigenous and Tribal
Peoples Convention of 1989, and the Convention on Biological Diversity of 1992 and
its 2010 Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable
Sharing of Benefits arising from their Utilization.

4. The Togso – is a semi-nomadic community and a dominant tribe habituating in the

Kamlang forest in the State of Hima Pradesh. This community is also well-known for
its rich knowledge of medicinal plants of the region. They rely entirely on their flora
and fauna for their survival and carry on their daily tasks without any external aid.

5. Even for medical treatment, they use their traditional methods, which are passed on
orally and by practice from generation to generation. The ‘Peri’ plant typically found
in this region of Eastern Ghat is used widely by the Tongso community for its properties
of energy stimulation, increasing blood flow, and improving stamina.

6. Alpha Pvt Ltd is a Pharmaceutical Company registered under the Company Act 2013.
It has deputed scientist Dr.Simon in the Eastern Ghat area to conduct research on
medicinal plants. They were amazed to see the properties of Peri leaves as an energy
booster and they convinced the tribal people to disclose more about the plant.

7. The scientists then carried independent research and found out the claims of tribal
people to be true. The extensive experiments on the Peri leaves led them to develop a
tablet named ‘Novak’. The tablet was claimed to be much faster in its effect of

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increasing stamina, than the raw eating of the peri leaves. Dr.Simon applied for a patent
for his product ‘Novak’ by claiming that they had invented an altogether new product
from Peri leaves. The Patent was granted on 31 st October 2022.

8. Dr.Simon being an employee of Alpha Pvt. Ltd, the patent rights were assigned to the
company as per their contractual understandings.

9. In 5 months after launch, Novak has become the bestselling medicine of Alpha Pvt.
Ltd and has made a huge profit. Alpha Pvt. Ltd entered into a contract with the
government of Hima Pradesh to set up a new unit in the vicinity of Eastern Ghat on 1st
April 2023.

10. An NGO ‘Unnati’ working for the protection of the interest of the tribal community in
the Eastern Ghat came to know about the activities of Alpha Private Limited and its
plan of coming of the drug ‘Novak’. The NGO started an awareness campaign in the
state among the tribal community against the commercial exploitation and misuse of
their traditional knowledge. After the announcement of the contract for factory set-up,
there was a wide public outrage resulting in a protest. The tribal community at the
forefront of the protest demanded the cancellation of the patent and, cancellation of
contract in the interest of the conservation of biodiversity and of the traditional
knowledge system indigenous community.

11. The NGO gave a notice of post-grant opposition to patent given to ‘Novak’ to the
controller of the Patent under section 25(2) of Patent Act on 1st July 2023. The
controller accepted the notice and revoked the patent granted to Alpha Pharma Pvt. Ltd.
Alpha Pharma appealed before the High Court of Hima Pradesh challenging the
revocation order of the Controller. The appeal is scheduled for hearing before the
Hon’ble High Court of Hima Pradesh.

12. In the State of Hima Pradesh, after noticing the huge public outcry over the contract
made by the government of the state with Alpha Pharma, the Government in a press
conference held on 5th July 2023, announced that it is terminating the contract of
factory set-up citing the larger public interest.

13. Aggrieved by the arbitrary cancellation of the contract by the state without any prior
notice, the company filed a writ under Article 226 of the Constitution before the High

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Court of Hima Pradesh on 31st July 2023 against the state and demanded compensation
from the state for arbitrary cancellation of the contract as well as for damaging its
reputation in the business world. The company stated in its submission that the NGO
and the state has ulterior motives behind their moves and they are unnecessarily
dragging the company into litigation.

14. THE HIGH COURT OF HIMA PRADESH CLUBBED THE TWO CASES AND
FRAMED THE FOLLOWING ISSUES FOR ARGUMENTS IN THE CASE OF
ALPHA PHRAMA. PVT. LTD. V/S STATE OF HIMA PRADESH &
CONTROLLER OF PATENTS.

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ISSUES RAISED

The following issues have arisen for determination before the Hon’ble Court in the instant
matter:

ISSUE I

I. WHETHER THE INVENTION OF ‘NOVAK’ MEDICINE SATISFIES THE

TEST OF PATENTABILITY UNDER SECTION 3 OF THE PATENT ACT,
1970 OR NOT?

ISSUE II

II. WHETHER THE COMPANY IS LIABLE TO GET COMPENSATION FOR

ARBITRARY CANCELLATION OF CONTRACT OR NOT?

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SUMMARY OF ARGUMENTS

ISSUE 1: WHETHER THE INVENTION OF ‘NOVAK’ MEDICINE SATISFIES THE

TEST OF PATENTABILITY UNDER SECTION 3 OF THE PATENT 1970 OR NOT?

It is humbly submitted that, 'Novak', the tablet invented by the company qualifies as a
patentable invention under Section 3 of the Patents Act, 1970 since it fulfills the requirements
of novelty, inventive, and industrial applications. It is further emphasized that the tablet is an
inventive step, not a mere discovery, and has enhanced efficacy that sets apart as a significant
innovation in the filed. It is further contended that the Controller's decision to Revoke the Patent
was incorrect and arbitrary. The key grievances revolve around the Controller's apparent
disregard for the prescribed procedures. Moreover, it is asserted that th e Controller's actions
violated the principle of natural justice by not duly informing the company and robbing the
company a fair opportunity to protect its patent. This deprivation violates the fundamental
rights of the company. Thus, it is humbly requested before the court, to overturn the action of
the controller and pronounce that the company rightfully has patentability over the tablet.

ISSUE 2: WHETHER THE COMPANY IS LIABLE TO GET COMPENSATION FOR

ARBITRARY CANCELLATION OF CONTRACT OR NOT?

It is most respectfully submitted, the writ petition filed by the Petitioner under Article 226 of
the Constitution shall be maintainable as the fundamental right of the company has been
violated. The government has the right to enter into a contract and is liable to fulfill contractual
obligations as any other party to a contract. Also, such contracts shall not be unfair and deprive
the other party of its rights. The government of Hima Pradesh has arbitrarily canceled the
contract by not following the prescribed procedures of a contract. The mandatory notice prior
to the termination of a contract was not served by the government to the company, depriving
fair opportunity. This unreasonable and unfair action of the government is subject to judicial
review. Further, it is submitted that the arbitrary contract cancellation caused monetary and
goodwill losses to the company. Section 73 of the Indian Contract Act, of 1872, provides
compensation to the injured party in a contract, and the petitioner seeks to get c ompensation
under the provision.

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ARGUMENTS ADVANCED

ISSUE 1: WHETHER THE INVENTION OF ‘NOVAK’ MEDICINE SATISFIES THE

I.
TEST OF PATENTABILITY UNDER SECTION 3 OF THE PATENT ACT, 1970 OR
NOT?
It is humbly submitted before the Hon’ble High Court of Hima Pradesh that in light of the
aforementioned facts, it is firmly established that the invention of ‘Novak’ medicine satisfies
?
the test of patentability under Section 3 of the Patents Act 1970.
?

s I.a The medicine “Novak” is regarded as patentable.

1. A patent is an exclusive right conferred to an inventor to exploit his invention subject
to the provisions of the Patents Act of 1970 for a limited time period. Section 2(1)(m) 2
of the Patents Act, 1970 defines “patent” as a patent for any invention granted under
this Act. In “Telemecanique & Controls (I) Limited v. Schneider Electric Industries
SA, 2002” 3, the Delhi High Court observed that the patent created a statutory monopoly
protecting the patentee against an unlicensed user.
2. Section 3 of the Patents Act 1970 deals with inventions not patentable; it finds its basis
in Article 27 of the TRIPS, which reflects the Patentable Subject Matter. The provision
states that patents shall be available for any inventions, whether products or processes,
in all fields of technology, provided that they are new, involve an inventive step and
are capable of industrial application.
1.b.Novak is an invention and not a mere discovery
3. Section 2(1)(j) defines "invention" as a new product or process involving an inv entive
step capable of industrial application. The Patents Act of 1970 requires an invention to
be new; in “Bishwanath Prasad Radhey Shyam v. Hindustan Metal Industries,
1979”4, the Supreme Court observed that the fundamental principle of Patent Law is
that a patent is granted only for an invention which is new and useful. It must have
novelty and utility. It is essential for the validity of a patent that it must be the inventor’s

2 Section 2(1)(m) of Patents Act, 1970

3Telemecanique & Controls (I) Limited v. Schneider Electric Industries SA, 2002”94 (2001)
DLT 865
4 Bishwanath Prasad Radhey Shyam v. Hindustan Metal Industries, 1979AIR 1982 SC 1444

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own discovery as opposed to mere verification of what was already known be fore the
date of the patent.
1. It is humbly submitted that the medicine invented by the company through its
independent research and extensive experiments is new. It is further submitted that the
novel invention has utility due to the tablet’s faster effect of increasing stamina.
2. Further, discovery is not patentable, and only patents can be granted to inventions. In
the case of “Reynolds v. Smith, 1903” 5, the court observed that discovery means lifting
the veil and disclosing something which before had been unseen or dimly seen. While
invention is not merely disclosing something, it necessarily involves suggestion, a new
process, or a new combination for producing an old product or an old result.
3. It is humbly submitted that the medicine developed from the Peri leaves is an invention
and not a mere discovery, as extensive research and experiments were involved in
inventing the tablet.
1.c.Invention of Novak is an inventive step
4. Section 2(1)(ja) of the Patents Act, 1970 states that an inventive step means a future of
an invention that involves technical advances as compared to the existing knowledge
or having economic significance or both.
5. In “Bajaj Auto Ltd v. TVS Motors Company Ltd., 2008” 6, the court observed that the
inventive step should be such as could not have been discernable to the unimaginative
person skilled in the art and not something which was published in the prior art.
6. Pressing further emphasis on the concept, In “CTR Manufacturing Industries Limited
v. Sergi Transformer Explosion Prevention Technologies Pvt Ltd,2016” 7, the court
stated that the degree of inventiveness is irrelevant. Slight alterations or improvements
may yield dramatically important results and might be the result of great ingenuity, and
the same can be inferred from the present case.
7. It is humbly submitted that with the existing raw Peri leaves in the area; the company
used technological advancement in combination with research to invent a tablet with
better benefits. Additionally, the invention produced significant economic benefits for
the company.

5Reynolds v. Smith, 1903 377 U.S. 533

6Bajaj AutoLtd v. TVS Motors Company Ltd., 2008 (36) PTC 417 (Mad.)
7 CTR Manufacturing Industries Limited v. Sergi Transformer Explosion Prevention
Technologies Pvt Ltd,2016, 2016 SCC Online Bom 5538
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1.d.Novak has industrial capability

12. Section 2(1) (ac) of the Indian Patents Act, 1970 defines “industrial capability” as the
invention that is capable of being made or used in industry.
13. In “F. Hoffman-La Roche Ltd. v. Cipla Ltd.,2016” 8, the court observed that the
abovementioned section necessitates that the invention must have commercial use or
manifestation. ((it is not the product that is the focus of attention but the actual physical
substance created, which has the potential of a commercial manifestation)).
14. The petitioner humbly acknowledges the fact that within five months of the invention’s
launch, it became the bestselling medicine of Alpha Pvt Ltd and has made a huge profit.
Consequently, the government of Hima Pradesh signed a contract with the company to
set up a new unit for the production of the tablet in the vicinity.
1.e. Novak showcases enhanced efficacy
15. Section 3(d) of the Patents Act 1970 states that New Forms of Known Substances
Require to Show Enhanced Efficacy. Further, the section and its explanation prescribe
a class of invention which cannot be the subject matter of the patent. There are several
conditions stated within Section 3(d) that must be satisfied before the provision is
applied to bar a subject matter’s patentability.
16. The interpretation of Section 3(d) by the Supreme Court in“Novartis AG v. Union of
India, 2013 9” reflected that in the pharmacology filed, if “known substance” is any
substance whose existence is not confidential and is known to technical, commercial or
administrative personnel or members of the consuming public as consumed by the
community of the country. A known substance is considered an invention under the
Patents Act 1970 if it can be shown that the new form exhibits better efficacious
properties over the efficacy of the known substance used as a comparison.
17. The apex court, in a similar case, further discussed the meaning of the term “efficacy”.
It reiterated that it is the “ability to produce a desired or intended result”. The test of
efficacy would depend upon the function, utility or purpose of the product under
consideration. In the case of medicine that claims to cure a disease, the test of efficacy
can only be “therapeutic efficacy”.
18. The Supreme Court further reiterated that in the case of pharmaceuticals, if the product
for which patent protection is claimed is a new form of a known substance with known

8 F. Hoffman-La Roche Ltd. v. Cipla Ltd.,2016 (65) PTC 1 (Del) (DB)

9 Novartis AG v. Union of India, 2013 (54) PTC 1 (SC)
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efficacy, then the subject product must pass, in addition to clauses (j) and (ja) of Section
2(1), the test of enhanced efficacy as provided in Section 3(d).
19. In “F. Hoffman-La Roche Ltd. v. Cipla Ltd.,2016”,10 the court observed that Section
3(d) assumes that structurally similar derivatives of a known “substance” will also be
functionally similar and hence ought not to be patentable. However, on the contrary,
the Section provides that if the new form of the known substance is found despite a
structural similarity to demonstrate a better functionality i.e. “enhancement of the
known efficacy”, it would qualify for assessment under Section 2(1)(j) as it were a new
product involving an inventive step.
20. The petitioner, on the basis of the previously made contentions, hereby submits that
“Novak” passes the requirements of Section 2(1)(j) and(ja) of the act, in addition to the
test of efficacy as under Section 3(d) of the act. The independent research, exte nsive
experimentation, significant monetary benefit, the government contract and most
importantly, the increased efficacy by the tablet “Novak” and that the effect of the tablet
in increasing stamina is faster than the raw use and consumption of the Peri leaves.
Thus, satisfies the patentability criteria under Section 3 of the Patents Act 1970.
21. It is further submitted that under Section 2(c) of the Biodiversity Act, 2002,
“biological resources” includes plants with actual or potential use or value and
exclude “value-added products” and “human genetic material”.
22. The meaning of value-added product is a sealable commodity that has been enhanced
with additional qualities that make it worth a higher price than the raw materials used
to make it. the company had conducted rigorous research and experiments. In the instant
case, the company upon discovering the quality of the leaves conducted rigorous
research and experiments. Consequently, a tablet with better stamina-boosting quality
was invented. It is thus, contended that the company developed a value-added product
with the raw material, Peri leaves into the tablet “Novak”, which had greater monetary
and quality worth. In “M/S Sayeed Absar Bidi Works And 4 v. State Of U.P. And 2
Others, 2021” the Allahabad High Court reiterated a similar contention, concluding
that “value-added product” is out of the purview of the Biodiversity Act, 2002.

10 F. Hoffman-La Roche Ltd. v. Cipla Ltd.,2016 (65) PTC 1 (Del) (DB )

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1.2.Whether the Controller, under the Patents Act, 1970, rightly exercised its power in
revoking the Patent?
It is humbly submitted before the court that the Controller, under the Patents Act, 1970, did not
exercise its power rightly in revoking the Patent.
1.2a. Non-adherence to the prescribed procedure
22. Section 25(2) of the Patents Act,1970, provides post-grant opposition to a patent
granted. Where an application for a patent has been published but a patent has not been
granted, any person interested may, in writing, lodge an opposition with the Controller
against the grant of a patent.
23. It shall be noted by the court that upon receipt of such notice, the Controller shall notify
the patentee where such notice of opposition was submitted as prescribed under Section
25(3) of the Act. In the instant case, there is no mention of the notice to the company.
24. Additionally, the Controller, upon receipt of the notice, shall constitute a Board known
as the Opposition Board. This board shall conduct an examination based on the notice
of opposition and documents conferred to it by the Controller, as provided under
Section 25(3)(b) of the Patents Act, 1970.
25. Further, Section 25(4) of the Patents Act, 1970, states that when the board concludes
its examination in accordance with the prescribed manner, the Controller shall take the
recommendation of the Opposition and, after giving the patentee and the opponent an
opportunity of being heard, the Controller shall order either to maintain or to amend or
to revoke the patent.
26. In the instant case, upon the receipt of the post-grant opposition notice by the NGO, the
Controller accepted the notice and revoked the patent granted to Alpha Pharma Pvt.
Ltd. On the basis of the above contentions, it is evident that the Controller has
conveniently omitted the prescribed procedure laid under the statute and acted
arbitrarily.
27. Additionally, Rule 57 of the Patents Rules 2003 requires the opponent to send a written
statement setting out the nature of the opponent’s interest, the facts upon which he bases
his case and relief which he seeks and evidence, if any, along with notice of opposition
and shall deliver to the patentee a copy of the statement and evidence, if any.
28. In the instant case, the NGO only submitted a notice to the Controller, and the company
was wrongly kept in the dark of this development.

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1.2b Violation of the Principle of Natural Justice

29. Audi Alteram Partem is considered the principle of fundamental justice or equity or
the principle of natural justice. This principle includes the rights of a party to be heard
or to have a fair opportunity to challenge the evidence presented by the other party, the
right to present evidence.
30. The right to a fair hearing requires that individuals should not be penalised by decisions
affecting their rights, especially their fundamental rights, unless it is done according to
all the procedures established by the law in Article 21 of the Constitution of India; that
means they should be given prior notice of the case and definitely a fair opportunity to
answer and present their own case.
31. It is further submitted that the audi alteram partem facet of natural justice is also a
requirement of Article 14 of the Constitution of India, for natural justice is the antithesis
of arbitrariness as rightly elucidated in the case of “D.T.C. v Mazdoor Union D.T.C.,
A.I.R. 1991 SC 101. 11”
32. It is humbly submitted that, in the instant case, the company was not notified in regard
to the notice by the opposition. Also, the Controller violated the company’s
fundamental rights under Article 14 and Article 21 of the Constitution of India by not
adhering to the procedure and arbitrarily exercising its power.
33. It is humbly submitted that as held by the Division Bench of this court in Neon
Laboratories Pvt. Ltd. v. Troikaa Pharma Limited, 12 that if no hearing is given on the
amendment application, it would vitiate the proceedings and would render the final
order void and that such an order is procedurally ultra vires and that it suffers from
jurisdictional error. It was submitted that the additional evidence which was led was
behind the back of the Petitioner. Secondly, it was submitted that hearing was not given
on the amendment applications which were allowed by Respondent No. 3 and,
therefore, on all these grounds, there is clear breach of principles of natural justice and,
therefore the said order was to set aside on the following grounds.
34. It is further submitted that the maxim Nemo judex in causa sua is applied to the
appearance of any possible bias, even if there is none, for as justice should not only be
done but also should be seen to be done.

11 D.T.C. v Mazdoor Union D.T.C., A.I.R. 1991 SC 101

12Neon Laboratories Pvt. Ltd. v. Troikaa Pharma Limited 2011 (45) PTC 357 (Bom)

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35. In the instant case, the company has been deprived of justice due to the actions of the
Controller. The company shall be given fair opportunity to safeguard its rightful
invention. Thus, the whimsical decision of the Controller abridges the fundamental
right of a person to be heard shall be regarded as arbitrary and in violation of Article 14
of the Constitution. in the light of the decision in “M.P. Electricity Board, Jabalpur v.
Harsh Wood Products, (1996) 4 SCC 522” 13.

13 M.P. Electricity Board, Jabalpur v. Harsh Wood Products, (1996) 4 SCC 522
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ISSUE 2: WHETHER THE COMPANY IS LIABLE TO GET COMPENSATION FOR

II
ARBITRARY CANCELLATION OF CONTRACT OR NOT?

?
It is humbly submitted before the Hon’ble High Court of Hima Pradesh that the arbitrary
? cancellation of the contract was totally based on unreasonable cause and consequently damaged
the reputation of the company in the business world. Thus, the company is liable to get
s
compensation.

2.1. The Maintainability of the Writ.

1. When the government enters into a contract, it has to do so in a fair manner without any
prejudice, and such a contract is subject to judicial review power of the Judiciary. The
power of judicial review is exercised to keep the unfair practices which may be
exercised by the Government or the officers who act on their behalf in check. Therefore,
it plays an important role in ensuring that the interest of the contracting party is
protected.
2. It is further submitted that judicial review is a powerful tool in checking arbitrary
Government contracts, but this power cannot be used at any time because it would
amount to infringing on the rights of the Executive to enter into contracts. So, whenever
the contract is arbitrary or is against the proper procedure, the power of judicial review
can be used.
3. In the case of “Tata Cellular v. Union of India,1994”14 1996 AIR 11, the Supreme
Court observed that The Government should be given the freedom to enter into a
contract, but this freedom should be subject to the test of reasonableness and should
also be free from any arbitrariness.
4. It is humbly submitted that in the instant case, the government entered into a contract
with the company on the pretence of developing a new unit in the vicinity of Eastern
Ghats. However, the government, without any prior notice of termination and
justiciable reason, cancelled the contract, constituting the act to be arbitrary in nature.
This entitles the company to resort to judicial review and invoke the Writ jurisdiction.

14 Tata Cellular v. Union of India,1996 AIR 11

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5. It is further submitted that in “ABL International Ltd. v. Export Credit Guarantee

Corporation of India, 2004” 15 3 SCC 553, the arbitrary action of termination of the
contract is amenable to jurisdiction under Article 226 of the Constitution. The Bench
expressed that the action of the State in termination of the agreement was not only
violative of principles of natural justice but also fair play.
6. It is further contended that the State and its instrumentality cannot be allowed to
function in an arbitrary manner, even in the matter of entering into contracts. The
decision of the State either in entering into the contract or refusing to enter into the
contract must be fair and reasonable. It cannot be allowed to pick and choose the
persons and entrust the contract according to its whims and fancies. Like all its actions,
the action, even in the contractual field, is bound to be fair. It is settled law that the
rights and obligations arising out of the contract after entering into the same are
regulated by the terms and conditions of the contract itself this stance was elucidated in
the case of “Y.Konda Reddy v State of A.P16., AIR 1997” AP 121.
7. In “U.P. State Bridge Construction Corpn Ltd v. Bangalore Development Authority,
2005” 17, the court observed that a writ court is not always bound to relegate the
aggrieved party to a civil suit and that merely because the other party has raised a factual
dispute. The mere raising of a dispute about a fact does not make a disputed fact. The
writ court can go into such an attempt at disputing things, adjudicate it and grant
appropriate relief.
8. It is hereby submitted that upon the arbitrary cancellation of the contract, the company
has rightly appealed in the High Court of Hima Pradesh under Article 226 of the
Constitution. The procedure that has been taken by the authority is against the
provisions of Article 14, and there is non-compliance with the proper procedure. The
court cannot ignore such actions, and it has to exercise its power of granting the remedy
under the Writ jurisdiction.

2.2. Arbitrary Cancellation of Contract

15
ABL International Ltd. v. Export Credit Guarantee Corporation of India, 20043 SCC 553
16 Y.Konda Reddy v State of A.PAIR 1997” AP 121
U.P. State Bridge Construction Corpn Ltd v. Bangalore Development Authority, AIR 2005
17

NOC 201 (Kant)

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2 nd NATIONAL MOOT COURT COMPETITION, NAVRACHANA UNIVERSITY, 2023

9. The contract entered into by the government and the company is for the development
of a new unit in the area. This is consequential to the patentability of the tablet and,
subsequently, the success of the tablet.
10. In “Sugen Inc. v. A. Rao, 2013”18, the Delhi High Court condemned the view that the
Patent, once revoked, remained non-existent and unenforceable till the order of
revocation was set aside, notwithstanding the order of stay of revocation. The court
further opined that the revoked patent should remain existent till the revocation order
is set aside.
11. In the instant case, despite the controller revoking the patent arbitrability, the company
still has the right title of patent on the tablet, Novak. Thus, the government cancelling
the contract was not justifiable.
12. It is humbly submitted that in the case of “M/S Kuldip Tourist Taxi Service vs.
Doordarshan Kendra & Ors.” 19, the Delhi High Court observed that There could
absolutely be no justification for dislodging the contract without any justification or
explanation. Such action of discontinuing services is dishonest and manipulative,
suffers from the vice of arbitrariness, and is in breach of the principles of natural
justice.
13. The Supreme Court in “Central Inland Water Transport Corporation Ltd v. Brojo
Nath Ganguly & Anr” 20 (1986 SCR (2) 278) reiterated that the termination was
unreasonable and the contract could not be rescinded by just terminating the same
without disclosing any reason. The court observed that Contracts in prescribed or
standard forms or which embody a set of rules as part of the contract are entered into
by the party with superior bargaining power with a large number of persons who have
far less bargaining power or no bargaining power at all. Such contracts which affect a
large number of persons or a group or groups of persons, if they are unconscionable,
unfair and unreasonable, are injurious to the public interest. To say that such a contract
is only voidable would be to compel each person with whom the party with superior
bargaining power had contracted to go to Court to have the contract adjudged voidable.

18 Sugen Inc. v. A. Rao, 2013 (54) PTC 560 (Del)

19 M/S Kuldip Tourist Taxi Service vs. Doordarshan Kendra & Ors 2022 SCC ONLINE Del
159
20 Central Inland Water Transport Corporation Ltd v. Brojo Nath Ganguly & Anr 1986 SCR

(2) 278
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This would only result in a multiplicity of litigation, which no Court should encourage
and would also not be in the public interest.
14. It is humbly submitted that the termination of the contract by the government was
merely based on a protest and actions of an NGO. There is no reason for the government
to cancel the contract and deprive the inhabitants of the Eastern Ghats of growth and
development. Not only this, but the arbitrary cancellation of the contract hurt the
reputation of the company, which invented medicine for the greater good of humanity.
15. It is further submitted that equality is antithetical to arbitrariness. In fact, equality and
arbitrariness are sworn enemies; one belongs to the rule of law in a republic, while the
other to the whim and caprice of an absolute monarch. Where an act is arbitrary, it is
implicit in it that it is unequal both according to political logic and constitutional law
and is violative of Article 14. the principle of reasonableness, which, legally as well as
philosophically, is an essential element of equality or non -arbitrariness, pervades
Article 14 like a brooding omnipresence and must answer the test of reasonableness in
order to be in conformity with the article, as observed by the Supreme Court in the case
of “Maneka Gandhi v Union of India, AIR 1978 21” SC 597.
16. It is hereby submitted that the cancellation of the contract by the state government,
without any justification and notice, evidently reflects the arbitrary action of the
government. This violates the company’s fundamental right under Article 14 and
should be granted a remedy under the same.
17. It is further submitted that the government on the arbitrarily cancelling the contract has
violated the company’s fundamental right to freedom to trade and occupation as
provided under Article 19(1)(g) of the Constitution of India. In Madras High Court in
Narasaraopeta Electric Corporation Ltd. v. State of Madras, AIR (1951) Mad 979,
held that the article applies only to citizens and a company incorporated under the
Companies Act. This entitles the company to challenge a state action against a company
on the touchstone of Article 19(1)(g). The government arbitrarily cancels the contract,
which violates the company's rights to carry occupation in any part of the country .

2.3. Cancellation of the contract without a notice

21 Maneka Gandhi v Union of India, AIR 1978 SC 597

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2 nd NATIONAL MOOT COURT COMPETITION, NAVRACHANA UNIVERSITY, 2023

18. It is humbly submitted that in “Birendra Prasad Singh v. State of Bihar, 2021 22”, the
Patna High Court observed that the respondents had acted in a most arbitrary manner
in terminating the contract without following the mandatory requirement of issuing a
notice of termination, before taking the decision to terminate the agreement, their action
could not sustain.
19. The court further reiterated that the State is not free to act according to its own standards
and that the termination of a contract by the State without mandatory notice is illegal.
20. It is humbly submitted that in the instant case, the government terminated the contract
publicly without any prior notice served to the company. The non -compliance of the
government to the standard procedures of the contract reflects its arbitrary use of power
and enduring the company with losses.

II.4. Right to get compensation

21. It is humbly submitted that in the instant case, the contract is a government contract as
one of the parties is the Government.
22. Under Article 298 23 of the Indian Constitution, the power of the Union and the State
government to carry on any trade or business has been provided. For the formation of
a government contract, the requirements under Article 299 have to be fulfilled, and if
they have been fulfilled, a contract can be enforced against the Government.
23. Under Article 299 Clause 2, the government is provided immunity from any personal
liability which may be incurred due to non-performance of the contract. This immunity
is provided to them only, but it does not mean that the Government is also not liable for
the contract because it would be unfair to the other party.
24. It is submitted that the liability of the Government will be the same as is the case in a
normal contract under the Indian Contract Act of 1872. Thus, a person can sue the
Government for the breach of contract and may be awarded damages by the court.
25. In common parlance, compensation is often used to refer to damages as well. Moreover,
the Indian Contract Act 1872 refers to the term ‘compensation’ in the context of
liquidated and unliquidated damages.

22Birendra Prasad Singh v. State of Bihar, 2021 Pat 5226

23Power to carry on trade, etc The executive power of the Union and of each State shall
extend to the carrying on of any trade or business and to the acquisition, holding and disposal
of property and the making of contracts for any purpose
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2 nd NATIONAL MOOT COURT COMPETITION, NAVRACHANA UNIVERSITY, 2023

26. Section 73 of the Contract Act of 1872 deals with actual damages following a breach
of a contract and the injury resulting from such breach, which is in the nature of
unliquidated damages. These damages are awarded by the courts on an assessment of
the loss or injury caused to the party suffering such breach of contract as observed by
the court in “Steel Authority of India Ltd. v. Gupta Brother Steel Tubes Ltd. 2009”
2410 SCC 63.
27. In “A. T. Brij Paul Singh v. State of Gujarat, (1984)” 25 4 SCC, the Hon’ble Supreme
Court held that “When a contractor bids for a tender, he expects to earn some profit if
his bid is accepted and thereon a works contract is entered into. If, upon execution of
such a work contract, the owner/parties entrusting the work commits a breach of
contract, the contractor would be entitled to claim damages for loss of profit against the
profit he expected to earn in the contract. For evaluation of loss to the contractor,
minutest details need not be examined; a broad evaluation would be sufficient.” In the
instant case, the company also had the company intended to earn certain profits from
the contract, bearing the fact that the tablet developed by them is in high demand.
However, the government arbitrarily cancelled the contract,thus on same grounds the
company is liable to get the compensation for loss of profits.
28. Loss of profit is a reduction in the profit earning of an entity. In a works contract, a
reduction of profit can occur due to several reasons. For instance, the cost of input of
the contractor may increase from what has been anticipated when the contract was
entered into; such expenditure is a direct expenditure of the contractor towards the
contract. Similarly, the allied expenses of the contractor, which are ca lled overhead
expenses, may also increase during the working of the contract.
29. In Bharat Coking Coal Ltd. v. L.K. Ahuja 26, (2004) 5 SCC 109 has held that "It is not
unusual for the contractors to claim loss of profit arising out of diminution, in turn, over
on account of delay in the matter of completion of the work. What he should establish
in such a situation is that had he received the amount due under the contract, he could
have utilised the same for some other business in which he could have earned profit. In
the instant case also, the company expected a certain amount of profits upon the
establishment of a new unit, which would further escalate the sale of the patented
tablet. The government has acted in an arbitrary manner without conducting a proper

24 Steel Authority of India Ltd. v. Gupta Brother Steel Tubes Ltd. 200910 SCC 63
25 A. T. Brij Paul Singh v. State of Gujarat, (1984) 4 SCC
26 Bharat Coking Coal Ltd. v. L.K. Ahuja (2004) 5 SCC 109

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investigation. The Petitioner was not granted a fair opportunity to defend itself and
refute the arbitrary action taken by the Controller. This action of the government has
caused the company to lose of profit claims.
30. It is further submitted that the workings of the company are on a halt due to the arbitrary
cancellation of the contract. Consequently, hampering monetary gains and damaging
the reputation of the industry. On humbly acknowledging the facts of the instant case,
the petitioner should get compensation.
31. It Further, the government is liable to pay compensation in order to recover damage
caused to the reputation of the company by the unfair and non justifiable actions of the
Government.

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PRAYER

Wherefore, in the light of facts stated, issues raised, authorities cited & arguments advanced, it
is most humbly prayed & implored before the Hon’ble Court, that it may be graciously pleased
to adjudge & declare-

1. That, the Order issued by the Controller, which granted the revocation of the
patent is to be set aside.
2. That, the Petitioner is to be awarded due compensation for the losses incurred
as a consequence of the arbitrary action of the Government by cancellation of
the contract.

And pass any other relief, that this Hon’ble Court may deem fit and proper in the interest
of Justice, Equity, and good conscience.

For this act of Kindness, the Petitioner shall be duty-bound forever pray.

Sd/-

(Counsel for the Petitioner)

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